Feed barley bids soften, but still firm overall

(Commodity News Service Canada) — Barley prices in the key Lethbridge, Alta. feeding area have softened over the past few weeks, but are unlikely to see much further downside heading into the new year if the outside grain markets remain firm.

“The feedlots are covered well for the rest of this year and into January,” said Jim Beusekom of Market Place Commodities at Lethbridge, adding that “they’ve done their homework to make sure they are not caught short.”

Cash prices have edged lower from highs in the $195 per tonne area in the first week of December to current levels around $190.

Freight availability has tightened up leading to wider spreads in prices between barley sourced from near Lethbridge and grain being sourced from farther away. The freight increases are coming off the price seen by farmers.

While farmers are so far unwilling to accept the higher freight costs, “when we get into more active trade in January, either our delivered price will go up, or the FOB farm prices will go down.”

Farmers were looking to sell at about 15 to 20 cents per bushel above current levels, Beusekom said. Expectations for active buying in January could be supportive, he said, especially as the general trend in the outside commodity markets appears to be higher.

However, he added, the outside market conditions could easily change in the new year, spilling over to barley as well.